Asian Sky Quarterly 2023 Q4

GLOBAL BUSINESS AVIATION MARKET UPDATE
RESIDUAL VALUE
YoY % Change in Values
0-12 Years 13+ Years Total
-2.9%
-0.2%
11.8%
17.8%
13.0%
16.8%
32.4%
20.1%
23.5%
50.0%
29.3%
28.7%
67.6%
37.2%
21.4%
58.1%
29.5%
14.5%
39.9%
20.9%
8.1%
21.4%
11.5%
3.9%
7.4%
4.8%
0.8%
Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Q4 2023
xii
The above chart compares the year-over-year percentage change
in the bluebook value of like-aged aircraft over time (e.g., the
difference between the value of an eight-year-old aircraft from one
year to the next). Global Jet Capital analyzes a basket of aircraft
as a proxy for the overall market. Observed increases or decreases
in value are not necessarily applicable to any specific aircraft
make/model. For the value of a specific aircraft, please contact a
licensed aircraft appraiser.
Average business jet bluebook values declined 0.2 percent in
Q4 2023 compared to Q4 2022, following two years of value
increases. As inventory increased, price negotiations between
buyers and sellers became more balanced in 2023 than in 2021
and 2022.
Values varied on a model-by-model basis and, on average, younger
aircraft performed better than older aircraft. In Q4 2023 values on
13-year-old and older aircraft were down 2.9 percent compared
to a 0.8 percent increase for 12-year-old and younger aircraft.
This is a reversal from the trend during the earlier post-pandemic
period, when older aircraft outperformed younger aircraft as
many buyers chose to acquire older aircraft during the peak of
the market, reducing supply. At the peak of the market in Q3 2022,
bluebook values for older aircraft were up 67.6 percent year-overyear,
compared to only 28.7 percent for younger aircraft. Before
the COVID-19 pandemic, younger aircraft were considered more
desirable to most buyers, leading to better performance in the
marketplace. As the market normalized in 2023, these historical
trends re-emerged, leading to more stable values for younger
aircraft.
It’s worth noting that business jets are depreciating assets and a
steady decline in the price of an aircraft over its lifespan is to be
expected. The consensus among industry players is that a stable
pricing environment will reemerge as supply and demand come
into balance.
CONCLUSION
With many economists expecting slow growth in 2024, the
business jet market faces some headwinds leading into the new
year. Still, flight operations remain above pre-COVID levels as
many new users who entered the market in the COVID-19 era
continued to utilize business aircraft. In addition, OEM backlogs
and lead times remained high and pre-owned inventory was below
historical averages. These factors place the business jet market in
a strong position to remain resilient during any potential economic
disruptions that occur in 2024.
Notes
i
Oxford Economics, ii Wells Fargo, iii Wells Fargo, iv Wells Fargo, v Wells Fargo, vi WingX and Global Jet Capital Analysis, vii AIN, viii Company financial reports. Dassault does not report its quarterly
results therefore data is based on reports from Cessna, Bombardier, Embraer, and Gulfstream., ix JetNet and Global Jet Capital Analysis. Units are in parentheses., x AMSTAT and
Global Jet Capital Analysis, xi JetNet and Global Jet Capital Analysis, xii Aircraft Bluebook and Global Jet Capital Analysis
FOURTH QUARTER 2023 — ASIAN SKY QUARTERLY | 40